New FTX CEO hired to clean up SBF’s mess is being paid $1,300 an hour

Restructuring experts are trying to keep paying executives’ wages despite the freeze on company funds and the lack of clear records of who is owed what. Legal documents filed in the US Bankruptcy Court for the District of Delaware over the weekend ahead of Tuesday’s first hearing shed more light on the bankruptcy proceedings.

FTX’s fortunes quickly plummeted after CoinDesk revealed on Nov. 2 that the company had blurred lines with supposedly independent trading arm Alameda Research. It could have left as many as 1 million creditors, including crypto users unable to withdraw funds from their accounts.

The continued payment of salaries “is necessary to preserve the resources and value” of the FTX estate, according to the filing by Edgar Mosley, managing director of restructuring consultancy Alvarez & Marsal. “Without them, I believe even more employees could be looking for alternative employment opportunities … likely, which would weaken stakeholders’ confidence in the debtors’ ability to reorganize successfully.”

Payments to Chief Executive Ray, as well as $975 hourly billing to Chief Administrative Officer Kathryn Schultea, Chief Financial Officer Mary Cilia and Chief Information Officer Raj Perubhatla are “vital to the upkeep and management” of what remains of the company while it tries to reduce its debts in an orderly manner.

The filing also cites non-employee directors who were hired to ensure proper governance during the bankruptcy process, for which they charge a fee of $50,000 per month plus expenses.

Though noticeable, the fees can be small potatoes in the expensive world of corporate restructuring. In the low millions per year, Ray’s earnings would be a fraction of the $3.1 billion FTX owes its major creditors, the $2 billion it cost to wind down Lehman Brothers as reported in 2010, or the $21 billion that Ray’s predecessor, Sam Bankman Fried, was once able to claim his personal fortune.

Mosley also recommends continuing to pay up to $17.5 million to critical contractors, without whom the company could watch crypto assets being hacked or stolen and who may be out of reach of US court.

But determining who those key suppliers are is complicated by FTX’s cavalier record-keeping attitude — something Ray has previously criticized as the worst he’s seen in his 40-year restructuring career, including at failed energy company Enron . FTX still has trouble determining who was on its payroll, complicating efforts to pay out up to $1,000,000 in back payments. Ray has also criticized practices such as buying real estate in the Bahamas for employees with company funds.